Class Action Alleges Tesla Violated WARN Act in April Layoffs
Thousands of Tesla employees laid off in April are entitled to compensation, according to a new class action lawsuit.
Plaintiff Sharon Lane Chin, a former Tesla employee, filed the class action against Tesla Inc. on June 27 in a California federal court, claiming violations of the Worker Adjustment and Retraining Notification (WARN) Act.
The complaint, addressing mass layoffs and plant closings starting on April 14, alleges Tesla violated federal and California state laws by failing to provide the required 60 days’ advance notice before the layoffs.
Chin seeks to represent thousands of laid-off employees, demanding at least 60 days of back pay and benefits.
Tesla Employees Report Unexpected Layoffs
Chin, a Parts Advisor at Tesla’s Dublin, California manufacturing facility, says she was laid off unexpectedly in April.
She claims that over 14,000 other employees were similarly terminated without notice as part of Tesla’s mass layoffs.
The WARN Act mandates that employers with 100 or more employees provide 60 days’ advance notice of mass layoffs or plant closings to allow workers time to find alternative employment or training opportunities. Chin asserts this did not occur.
“[Tesla] ordered the termination of the Plaintiff’s employment along with more than 10% of its employees at the Facility without the required 60 days’ advance written notice,” she states.
According to the complaint, employees who had been with the company for at least six months within the twelve months preceding the layoffs are protected under the WARN Act. Despite this, the lawsuit alleges Tesla failed to notify its employees and relevant state authorities about the layoffs.
Financial Hardships Follow Abrupt Terminations
Chin says she and thousands of others suffered significant harm due to Tesla’s abrupt layoffs.
Tesla allegedly did not pay the laid-off workers their wages, salaries, commissions, bonuses, accrued holiday pay, or accrued vacation for 60 days following their terminations. It also failed to make pension and 401(k) contributions and provide employee benefits under ERISA, except for health insurance, for the 60 days, Chin claims.
She aims to represent all Tesla employees terminated at the Dublin facility around April 14, 2024, as part of a mass layoff or plant closing.
Rising WARN Act Lawsuits
Lawsuits under the WARN Act, designed to protect employees from sudden mass layoffs, are increasing. Several high-profile companies have faced legal battles and costly settlements for alleged violations.
In 2018, Toys “R” Us settled a lawsuit for millions after employees claimed they were terminated without the required 60-day notice following the company’s bankruptcy. More recently, Rosen Hotels and Resorts settled a $2.3 million WARN Act case involving employees laid off during the COVID-19 pandemic.
In 2024, several notable cases have emerged. In May, a former Red Lobster employee filed a class action lawsuit alleging the chain violated the WARN Act with surprise restaurant closures and layoffs. Similarly, a former Microvast battery factory employee filed a complaint claiming dozens of workers were terminated without cause or the mandated 60-day notice, causing significant hardship.
Even the prestigious Philadelphia University of the Arts (UArts) faced a class action lawsuit from former faculty and staff following its sudden closure in May 2024, sparking student protests and widespread criticism.
In the Tesla class action, Chin seeks damages, fees, costs, and a jury trial. She also requests restitution for unpaid wages, salaries, commissions, and benefits for the 60-day period following the terminations.
Case Details
- Lawsuit: Chin v. Tesla Inc.
- Case Number: 3:24-cv-03873-LB
- Court: U.S. District Court for the Northern District of California
- Plaintiffs’ Attorney: Daniel Feder (Law Offices Of Daniel Feder)